In the fight against tax fraud worth billions, the citizens’ movement Finanzwende fears setbacks due to the federal government’s legislative plans. The association criticizes the Bureaucracy Relief Act IV, which, among other things, provides for a reduction in the retention periods for accounting documents and invoices from ten to eight years. But receipts are important evidence in serious tax crimes such as cum-ex and cum-cum share deals, warned Finanzwende managing director Anne Brorhilker. “If the law goes through as it is, a lot of cum-cum offenders will get away with it, and billions of taxpayers’ money will be irretrievably lost.”
Brorhilker: Perpetrators will fire up the shredders
As a senior public prosecutor in Cologne, Brorhilker had spent years investigating Cum-Ex and CumCum cases herself before leaving public service. “The perpetrators know very well what legal explosives they have in their basements and on their servers,” she says. “As soon as the law comes into force, they’ll start up their shredders.” The association has launched a campaign against the law, which is due to be passed in the Bundestag on September 26th.
With the help of cum-ex deals, banks and other investors defrauded the German state of an estimated ten billion euros. Shares with and without dividend entitlement were moved back and forth around the dividend record date – in the end, tax offices refunded unpaid capital gains taxes. Cum-cum deals are considered to be related and more widespread, but even less clear.
The statute of limitations for these crimes was specifically increased from 10 to 15 years due to the complex investigations, said Brorhilker. “It is absurd that the retention periods are shorter than the statute of limitations anyway.”
Serious consequences feared for new investigations
Cum-Ex and cum-cum cases in which investigations are already underway are not affected by the new regulation, but all cases in which no investigations are yet underway are. “Especially with cum-cum, we only know the tip of the iceberg so far – and with this law we may never know the rest,” believes Brorhilker.
The tax damage from cum-cum is conservatively estimated at around 28.5 billion euros, of which only a fraction has been recovered so far. The federal government could speed things up, Brorhilker demanded, also with a view to the constraints in the federal budget.
© dpa-infocom, dpa:240920-930-238416/1
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